Lenders are legally required to check that a loan is affordable before approving it. They look at your monthly income alongside your regular outgoings, including existing repayments, direct debits, and spending patterns. This information is used to judge whether a new repayment is manageable without putting you in financial difficulty.
You've arrived at the NestEgg platform after exploring your borrowing options. NestEgg connects people with credit unions: community lenders focused on responsible, fair lending. As part of any application, the credit union will carry out an affordability assessment. This is a legal requirement and it's there to protect you.
Why is an affordability check required?
UK regulations require all lenders, including credit unions, to confirm that a loan is affordable before approving it. It's designed to prevent people being put in financial difficulty by a loan they can't comfortably repay.
What does a lender consider?
Lenders look at income and outgoings together: your monthly take-home pay, whether it's stable, and your regular financial commitments. Things that can affect a decision include:
Several missed payments or bounced direct debits in recent months
Very frequent or high-value gambling transactions
Heavy use of Buy Now Pay Later for everyday essentials
An active Individual Voluntary Arrangement, Debt Management Plan, or Debt Relief Order
A County Court Judgement on your credit file
How does the lender get this information?
Credit unions will ask you to connect via Open Banking so they can review your income and expenditure. If you prefer not to, some accept three months of bank statements and payslips instead. However, this takes longer to process.
What to do next
Continue your application - the credit union will tell you what they need from you.
Opt into Open Banking so that the credit union can see a full real-time picture of your affordability
Or if you choose not to use Open Banking, have your last three payslips and three months of bank statements ready, as the credit union will request these.
If you have questions about what's being asked at any point, contact the NestEgg support team.